Securities Fraud Lawyer Blog
Zabala Farms Group LLC Managers Hit with $3.8 Million Judgment
Zabala Farms Group, LLC managers Anthony Johnson and Jeremy Johnson were found liable to an investor, and ordered to pay him $3.8 million in damages for selling unqualified securities in the form of membership interests in GPA Enterprises, LLC and Target Equity, LLC.
On October 28, 2019 Judge William Barry presiding in Dept. S302 of the Riverside Superior Court (Murrieta branch) found in favor of the Plaintiff, and against Anthony Johnson, Jeremy Johnson, GPA Enterprises LLC and Target Equity LLC. The Plaintiff filed his complaint on May 29, 2019 asserting claims for violations of the California Securities Law of 1968, including claims for selling unqualified securities and selling securities via omissions of material fact. Judgment was entered by the clerk on November 4, 2019 in the amount of $3,829,833.
Target Equity, LLC, one of the named Defendants was merged into Zabala Farms Group, LLC. Anthony Johnson and Jeremy Johnson serve as managers for both companies.
The events giving rise to the filing of the complaint and the judgment were the sales of unqualified securities issued by GPA Enterprises and Target Equity, and sold by Jeremy Johnson and Anthony Johnson, who were control persons for both LLCs. In an unrelated desist and refrain order the State of California found that GPA, Target and the Johnsons sold unqualified securities by means of a general solicitation, thereby making any exemption from qualification unavailable to the entities and the Johnsons. In addition to Anthony Johnson, Jeremy Johnson, GPA Enterprises and Target Equity the desist and refrain also covered activity by Green Bud Initiatives, Smart Initiatives and DHW Marketing. The Johnsons have used the Green Bud Initiatives entity to communicate with investors on the progress of the Zabala Farms transaction.
In May, 2019 Anthony Johnson and Jeremy Johnson merged Smart Initiatives, Valley View Enterprises and Target Equity, LLC into Zabala Farms Group LLC, for the purpose of acquiring a 100% interest in Zabala Farms of Salinas, LLC.
Zabala Farms of Salinas is a company that operates a 63,000 square foot marijuana cultivation facility in Monterey County, California. Their greenhouse supposedly produced over 1,500 pounds of cannabis through April 5, 2019, with approximately 56,000 plants on site in different production stages.
To date, Plaintiff’s judgment against Anthony Johnson, Jeremy Johnson, GPA Enterprises and Target Equity remains unsatisfied.